Speakers: Prof. Alan Neal, Director, Employment Law Research Unit, University of Warwick;
                Anne Van Lancker, MEP, Rapporteur on the Services Directive, Employment and Social Affairs Committee
                Daniel Gros, Director, CEPS
                Douglas Gregory, Vice-President, Governmental Program, Europe, Middle East, Asia, IBM
 
Date: 22 June 2005
 
Prof. Alan Neal – regretting the recent hi-jacking of the Directive by domestic policy-makers – started with a legal perspective on the proposed legislation. His main point was that the proposal is too horizontal a measure; in other words, it is too broad, trying to cover too many fields at the same time. However, according to Prof. Neal, a Service Directive is needed because liberalisation of the services market has never been satisfactorily implemented. Yet, although everyone agrees that the ambition for administrative simplification is desirable, the political context of these ambitions is its greatest obstacle: EU enlargement. Enlargement made people aware that the Directive is not only an economic instrument for intangible assets, but that people are affected too; and this is exactly where national politicians unnecessarily hi-jack the Directive. Prof. Neal concluded his speech by pointing out the question of who is enforcing the Directive. Who guarantees a level playing field?
 
MEP Anne van Lancker gave her opinion on the Directive from a policy-maker’s perspective. She stresses that she deeply regrets the over-politicisation of the discussion, which effectively led to an unintended battle between the old and new member states. Although Van Lancker is generally in favour of an internal market for services, she points out a couple of criticisms of the current proposal. Challenging the broad scope the Directive, Van Lancker argues for a more sectoral approach (one in which business to business and business to consumer transactions would be dealt with separately) as opposed to the Commission’s “bulldozer method”. In that context, she thinks that the subsidiarity principle should be in force. Furthermore, Van Lancker challenges the much debated country-of-origin principle on the basis that such a principle assumes a degree of trust between countries, which does not exist in reality. One country simply may not trust the quality etc. of service providers from another country. It would boil down to a competition in legislation instead of competition in wages. She concludes by reminding that the existing red tape has to be removed, but countries should not be forced to bin all the legislation and should be able to continue regulating some of their services.
 
Next, Daniel Gros briefly commented on the economic need for the Services Directive. He began by pointing out some figures on the European services sector: it represents more than 70% of GDP, and 20-25% of industry. However, when the focus is on cross-border trade, we see that it hardly exists in the services sector. Thus, liberalising such a large sector should imply huge economic gains (although it would be hard to put a figure to this assertion). Further, he argued that in the US, recent productivity gains had been driven by the services sector, but nothing like this happened in the EU. Liberalising services could remedy this stagnation. Gros was also surprised by Van Lancker’s attack on the country-of-origin principle. Similar fears preceded the Internal Market programme but then proved unfounded.
 
Finally, Douglas Gregory added a business perspective to the debate, stressing the urgent need for a services directive – in whatever form – even for a big business to business player such as IBM who is already present in all 25 member countries. Since he thinks that the by now well-known Polish plumber in France is a particularly bad example for the effects of the Services Directive, he offers a much better example of what it could change: at the moment, companies in Greece are required to provide the name of all their shareholders to the authorities – a multi-year project for IBM. The Services Directive might prevent such legislative particularities and ease business across European borders. Gregory stresses his hopes that the current debate on social models will in the end lead to modernisation, which stays distinctly European after all.
 
After the Q&A session, the speakers engaged in a little forecasting on the possible date and form of the Services Directive. Alan Neal expects something like a directive by the middle of next year, but emphasizes the immense complexity of the area, which could still lead to much confusion. Similarly, Daniel Gros expects the Directive by mid next year, and stresses the importance of the country-of-origin principle. He would favour a broad, generalised start with some possible exceptions later on. Anne van Lancker once more disagreed with a generalised country-of-origin principle, as there is a need for a level playing field (due date mid next year). Finally, Douglas Gregory linked up with Daniel Gros, arguing that only the inclusion of the country-of-origin principle can lead to growth; anything else would be nothing. On principle, however, he does not engage in any speculations about the form and date, as he is even suspicious of the weather forecast…